Patrick S. Miles
Alphatec HoldingsAbout Patrick S. Miles
Patrick S. Miles, age 59, is President, Chief Executive Officer, and Chairman of the Board of Alphatec Holdings, Inc. (ATEC). He has over 30 years in orthopedics and spine, and holds a B.S. in Finance from Mercer University . He served as Executive Chairman from October 2017 to March 2018 and has been Chairman and CEO since March 2018 . Under his leadership, ATEC delivered 2024 revenue of $612 million (+27% YoY), expanded adjusted EBITDA margin by ~690 bps, and generated $9 million of Q4 free cash flow; ATEC ranked at the 90th percentile for 1-year revenue growth and 75th percentile for 3-year TSR within its 2024 peer group, though 1-year TSR ranked at the 19th percentile .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| NuVasive, Inc. | Vice Chairman; prior President & COO; President, Global Products & Services; President of the Americas; EVP Product Marketing & Development; SVP & VP Marketing | 2001–2017 (various roles), Board 2015–2017 | Led product, commercialization, and operations across spine portfolio; board-level strategic oversight |
| ORATEC Interventions, Inc. | Director of Marketing | Prior to 2001 | Advanced minimally invasive surgical product marketing |
| Medtronic Sofamor Danek | Director of Marketing, Minimally Invasive Systems and Cervical Spine Systems | Prior to 2001 | Product marketing in spine systems |
| Smith & Nephew | Various positions | Prior to 2001 | Orthopedic segment experience |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| NuVasive, Inc. | Director | 2015–2017 | Board-level strategic planning for spine technology |
Fixed Compensation
| Element | 2024 Figure | Notes |
|---|---|---|
| Base Salary | $762,000 | Effective Feb 1, 2024; actual paid in 2024: $756,577 |
| Target Bonus % | 100% of base | Target bonus $762,000 |
| Actual Bonus Paid | $800,000 total; $400,000 cash + $400,000 equivalent in RSUs (48,240 RSUs) | Bonus RSUs vest 12/5/2025; RSU count based on $9.95 30-day avg price and 1.2x factor |
Performance Compensation
Annual Short-Term Incentive Plan (2024)
| Metric | Weighting | Company Payout % | Weighted Payout % | Notes |
|---|---|---|---|---|
| Revenue | 75% | 102% | 76% | Funding based on audited global revenue; threshold 96% of target |
| Adjusted EBITDA | 25% | 114% | 29% | EBITDA excludes specified items; cash bonus matrix with individual modifier ±50% |
| Aggregated Company Payout | — | — | 105% | CEO paid ~105% of target |
Long-Term Incentives (2024 grants and outcomes)
| Award Type | Target Units/Value | Performance Outcome | Earned Units | Vesting |
|---|---|---|---|---|
| Global Revenue Growth PRSUs | 245,381 target units; CEO target LTI value $5,153,000 including PRSUs and RSUs | 27% YoY revenue growth → 107% of goal; PRSU multiplier 1.27x | 311,634 units earned (127% of target) | One-third vests on 3/5/2025, 3/5/2026, 3/5/2027, subject to service |
| Time-based RSUs (annual LTI) | 81,794 RSUs | Time-based | — | One-third annually over 3 years from grant date |
| Bonus RSUs (for 2024 STI) | 48,240 RSUs | Time-based | — | Vest 12/5/2025; accelerated on certain terminations and change in control |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 7,205,477 shares; 4.86% of outstanding as of 4/16/2025 |
| Ownership Breakdown | Includes 1,327,434 shares via vested warrants; 721,193 via vested options; 250,000 shares held by MOM, LLC (managed by Mr. Miles) |
| Stock Ownership Guidelines | CEO required holding = 5x base salary; counts shares and RSUs; excludes options; 5-year compliance window |
| Hedging/Pledging | Company policy prohibits hedging and pledging (including using securities to secure margin or loans) |
| Related-Party Transactions | None to report |
Employment Terms
| Term | Key Provisions |
|---|---|
| Employment Start | Employment letter effective 10/2/2017; at-will |
| Current Role Tenure | Executive Chairman Oct 2017–Mar 2018; Chairman & CEO since Mar 2018 |
| Severance (non‑CIC) | Lump sum = 2x base salary + 2x target bonus; 18 months COBRA; full vesting of time-based awards vesting within 24 months; performance awards continue eligibility; option exercise extended to later of 90 days post-termination or remaining term; conditions include involuntary termination not for cause and general release |
| Change-in-Control (double trigger) | If terminated without cause or for good reason within 24 months post-CIC: lump sum of (i) 2x annual compensation; (ii) prorated portion of highest LTI grant-date fair value in prior 3 years (up to 6 months); (iii) prorated bonus (greater of current target or highest of last 3); 18 months COBRA; full vesting of service-based equity |
| 280G Treatment | Best‑net cutback; no excise tax gross‑ups |
| Clawback | Restatement-based clawback (Rule 10D-1/Nasdaq), effective 12/1/2023; applies to incentive comp received after 10/2/2023 |
| Non‑compete/Non‑solicit | Not specifically disclosed in proxy; severance conditioned on standard separation agreement and release |
Board Governance
- Roles: Chairman & CEO; not listed as a member of Audit, Compensation, or Nominating Committees (committees comprised of independent directors) .
- Lead Independent Director: Mortimer Berkowitz III; independent directors meet in executive session at each regular meeting .
- Committee Chairs: Audit—Karen K. McGinnis; Compensation—Ward W. Woods; Nominating—Mortimer Berkowitz III .
- Attendance: 2024 Board met 5 times; all directors attended ≥100% of Board and committee meetings; five directors attended 2024 annual meeting .
- Combined Chair/CEO Structure: Board permits flexibility; combined role deemed appropriate with Lead Director oversight and regular independent sessions .
Say‑on‑Pay & Compensation Framework
- 2024 Say‑on‑Pay support: ~85% approval .
- Philosophy: Pay‑for‑performance with significant variable/equity mix; use PRSUs tied to revenue growth and RSUs; multi‑year vesting for retention .
- Governance Practices: Independent committee and advisor (Compensia); clawback; double‑trigger CIC; no tax gross‑ups; limited perquisites; no hedging/pledging .
Performance & Track Record
| Metric/Highlight | Detail |
|---|---|
| 2024 Revenue | $612 million; +27% YoY |
| Adjusted EBITDA Margin | +~690 bps YoY improvement |
| Q4 2024 FCF | $9 million |
| Peer Group Percentiles | Revenue growth 1‑yr: 90%; Revenue growth 3‑yr CAGR: 85%; TSR 1‑yr: 19%; TSR 3‑yr CAGR: 75% |
Director Service and Compensation (Board service history and independence)
| Item | Detail |
|---|---|
| ATEC Board Service | Director since Oct 2017; Chairman since Mar 2018 |
| Committee Roles | None; committees composed of independent directors |
| Independence | Not independent (executive); independent directors designated under Nasdaq |
| Executive Sessions | Independent directors meet without management at each regular meeting |
Equity Vesting Calendar and Potential Selling Pressure
- PRSUs earned for 2024 vest in equal tranches on 3/5/2025, 3/5/2026, and 3/5/2027, subject to continued service; total earned units for CEO: 311,634 .
- Annual RSUs granted in 2024 vest one-third annually over 3 years from grant date .
- Bonus RSUs for 2024 STI vest in full on 12/5/2025; CEO grant: 48,240 RSUs .
- Company policy restricts hedging and pledging, which mitigates certain forms of liquidity-driven selling .
Compensation Structure Analysis
- Shift toward equity: Heavy use of PRSUs/RSUs vs. stock options, aligning realized pay with stock performance and reducing option-related risk .
- Cash vs. equity mix: 50% of 2024 bonus paid in RSUs with a premium factor to compensate for illiquidity, increasing alignment and retention .
- Targets set aggressively: 2024 revenue target exceeded prior year’s target by ~36%; revenue threshold at 96% to earn payout .
- Strong FY24 outcome: Aggregated STI payout funded at 105% on company metrics; CEO received ~105% payout .
Risk Indicators & Red Flags
- Combined Chair/CEO could raise independence concerns; mitigated by Lead Director, committee independence, and regular executive sessions .
- No hedging/pledging permitted; reduces misalignment risk .
- Clawback policy in place; restatement risk covered .
- No related-party transactions reported; governance comfort .
- No excise tax gross‑ups; shareholder‑friendly CIC design .
Compensation Peer Group (2024)
Peer set includes U.S. healthcare supplies/equipment companies with comparable revenue/market cap (e.g., Inari Medical, Glaukos, iRhythm, Orthofix, Tandem Diabetes, 10x Genomics); used for context, not strict benchmarking; percentile ranks indicate above‑median growth and strong 3‑yr TSR .
Investment Implications
- Alignment: Significant personal ownership (4.86%) and multi‑year equity vesting strengthen alignment; policy bans hedging/pledging .
- Incentive design: PRSUs tied to revenue growth and time-based RSUs create performance and retention levers; FY24 payout at 105% reflects strong execution .
- Change‑in‑control economics: Double‑trigger CIC with 2x pay plus prorated LTI/bonus and full service‑based vesting; no tax gross‑ups—moderate shareholder cost in a sale scenario .
- Governance: Combined Chair/CEO with robust independent oversight and regular executive sessions; 85% say‑on‑pay support indicates investor acceptance of pay structure .